 "Tata Power to sell 5% in Indonesia mine for $250 mn")
This is the second such sale of its coal assets in Indonesia in the last six months. The Indonesian coal mines were acquired as Tata Power hoped to control the costs of the fuel fed into its 4,000-megawatt Mundra Ultra Mega Power Project. However, changes in Indonesian laws, foreign exchange fluctuation and drop in coal mines' earnings had impacted the project.
The company would continue to hold 25 per cent stake in KPC if the option is exercised, the statement said. KPC will to continue to be part of supply chain for the Tata Power group's coal off-take requirements. The agreement is also to sell its entire 30 per cent stake in power infrastructure companies related to KPC. The agreement gives the option to sell stake to a Bakrie group entity, the statement said. Tata Power said the above options will vest, based on certain conditions are fulfilled. The aggregate considerations will be determined once the option is exercised and will be based on the valuation methodology agreed with the buyer, it said. "The option to partially sell KPC and its related power company has the potential to provide the company the flexibility to raise additional funds to meet the current challenges," said Anil Sardana, MD. "If the option is exercised, there will not be any impact on the coal supplies to our plants as we will stay invested in KPC mines to the extent of 25 per cent."